Almost half a century after his death, Winston Churchill was honoured in Jerusalem on Sunday with a statue and a tribute proclaiming him a friend of the Jewish people and the Zionist cause.

A large bronze bust was unveiled at Mishkenot Sha'ananim, outside the walls of the Old City, in recognition of the contribution made by Britain's wartime leader to the creation of the state of Israel. Made from an original cast by Oscar Nemon, whose statues and busts of Churchill are displayed around the world, the familiar profile would "correct a small historic injustice", said the UK ambassador to Israel, Matthew Gould. "My feeling is that in Israel he's not honoured enough; his story is not told enough."

The commissioning of the bust by the Jerusalem Foundation followed the publication five years ago of Churchill and the Jews by the statesman's official biographer, Martin Gilbert. "The book laid out in crystal clear form that Churchill throughout his life was a passionate believer in the cause of Zionism," said Antony Rosenfelder, a British trustee of the foundation.

He said that it was "astounding" how little recognition there had been in Israel "for a man who, over half a century, did so much not just to ensure Israel's survival but actually to help the development of the state. This is just a small way of thanking someone for something I think is fairly central to Israel today."

The ceremony was attended by the former prime minister's great grandson, Randolph Churchill. "It means a huge amount to our family," he said.

The bust is situated close to the walls of Jerusalem's Old City and within distant sight of the 8m-high concrete wall which cuts off Palestinian communities in east Jerusalem from the rest of the city. It is also near to the King David hotel, which was bombed in 1946 by Jewish militants when it was the headquarters of the British Mandate authorities. Ninety-one people were killed.

The Israeli historian Tom Segev said that, for some Jews, Churchill's failure to bomb the Nazi death camp at Auschwitz outweighed his support for the Jewish people. "Accepted opinion today is that he was a friend of Zionism and the state of Israel. But he did not have an emotional attachment. He regarded the whole thing as political," Segev said.